that will do it for this special edition of "the closing bell." thank you for being with us live from washington. remember, i hope you'll follow me on twitter and google plus. stay with cnbc, because "fast money" begins right now. see you back in new york tomorrow. >> and this is mission krill call, rise above washington, d.c. we're going to get to "fast money" in just a moment. but we've got to talk about what is going on here. you just heard maria's observation. she is not confident that a deal will get done. sadly, i feel the same way. especially after speaking with numerous lawmakers today. everybody seems very firmly entrenched, although eamon with the news just a moment ago that john boehner has indeed sent the president a counter offer, though republicans, to a man,

complained today that they do not know what cuts the democrats would like to make. senator harry reid coming out earlier today, saying, we're not going to offer up any cuts. we want the gop to put their cuts on the table. it is clear it is a game of finger pointing, which party is going to be made to look like the bad guys, because somebody's going to have to tell somebody no. that is certainly the deal here. stocks, though, did come off their highs, after those harry reid comments. that sent everybody into a little bit of a tail spin. i believe we do have some comments on tape here from some of the lawmakers we heard today. >> you give the president every single job harming tax increase that he's requested, you run the government for maybe nine or ten days. >> i think there's a real danger that we're going to end up with some damaging tax increases and nothing to show for it. >> if we took the president's revenue, we took the republic republicans' spending cuts and we put them together, we'd have a package of more than $4 trillion. >> what i hope boehner does not

do is give away the debt ceiling with any kind of deal unless it's the real deal. >> when the government spends money and a lot of these other so-called infrastructure investments, it ends up wasting the money, taking it from the private sector. >> i think we need to do the entitlement issue. >> i'm optimistic we're going to be able to avoid the fiscal cliff, we're not going to go over that. we're not going to see sequester. but the challenge is, is the deal going to be big enough? >> what we're being asked as the republican conference is jump off the cliff alone. if this is going to be a deal, we got to grab hands together and jump off together. >> i will tell you, discretionary spending is $1 trillion. our deficit was 1$1.2 trillion. we're 18 billion short of nothing. >> take something like simpso

simpson/bowles that came out originally. that is the first step to get the issue resolved. i have never seen anything like this. >> there you have it. sort of a string of comments from lawmakers, from former fed chairman alan greenspan and many in between, talking about what exactly needs to be done, guys, and we know there are big numbers out there in terms of the deficits that we face. tax increase, the president's talked about which seems to take up about 95% of our national dialogue, and media dialogue, just a couple of percent of our deficit problem. sooner or later the lawmakers are going to have to get serious, hammer out big numbers. going to leave you with the biggest number of all, which is more than $60 trillion, those are structural deficits that medicare and social security are facing over the next 30 some years. the fiscal cliff, as big of a story as it is, may simply be a launching point to bigger discussions in our lifetime. i just have that feeling, guys. >> yeah, i think you're right, brian. thank you for that. good stuff all day long, we should note. and this is certain little scary stuff that we're facing, especially when you heard a congress person say we should jump off that cliff together. but the markets are saying

fiscal cliff -- because, you know what, take a look at where we are in the markets. the s&p 500, highest level since november 6th. the dow, the highest level since october 22nd. within the markets, also, we're seeing sectors make record highs. the defense sector hitting a record high today, and you would think that that is the one sector that would feel it the most should we go over the fiscal cliff and see sequestrati sequestration. what is going on here, keith? >> i think you see the political class self-imploding on a daily basis. that's very bullish for a lot of people in this world. for the rest of us versus the political class, there's a lot of bad trades out there. if they get a deal done, i think that's good. the question to me is, what level of your liberties are you willing to compromise to get a deal. for me, it's not a lot. >> i think people are expecting the fed to do their work for them. so, we get to what i think is the more important issue here. the fed tomorrow is going to tell us if we're going into qe-4. i think the market has priced

that in. we're set up for a lot of disappointment if we don't get that here and now. at a time when the felt's been asked to do the heavy lifting for the government and they cannot and they should not, and this is big problem, if the fed can fund themselves, we're going to be in the position we're in. so, tomorrow is the fed, that is why the market is happy. that is a reason why i think we're overextended going into that fed. >> and really the big difference that i see here is a disconnect with what wall street thing thid what d.c. thinks. wall street believes that d.c.'s job is to go out there and avoid the fiscal cliff. all the congresspeople believe their job is to cut the debt and deficit. that really sets us up for disappointment, unfortunately. we've had a pretty good run here in the market, so, i think it's going to be tough sledding. >> as you see there, the dow, first five-day winning streak since march. it seems like the market is pricing in everything, but everything will get resolved, get more qe, get a deal by the end of the year and it seems like maybe now, the risk is actually to the down side. >> well, i actually sold a

couple of things today, one of them cummins, had a nice run, after some disappointing earnings, just because i feel like it's run so much, so much, you know, euphoria is priced in. i'm not optimistic they'll come up with something in time for the christmas break, but -- i don't know how the market is going to react to it so i can't -- i'm not able to think two steps ahead, what will happen and how will the market react, so, you know, i just got to trade around, value orientations, not around what i think -- >> fundamentals. that's crazy, karen. >> i know. crazy, but -- >> to be clear, trading the political bubble is not for the faint of heart. if you anchor on one thing, it's what tim was hitting on, which is the u.s. dollar. you get the dollar right, you get beta or you get the market right. the dollar comes in, because people are looking for bernanke to deliver the love, whatever it is. if he doesn't deliver it, dollar's up tomorrow, beta comes down. it's a really good trading environment if you use that dollar as your headlights. and there's a causal factor between policy and what the

dollar does. and you can kind of really key off of that. >> and policy, though, also, when you look over to europe, is another part of why i think stocks have gone higher. so, germany, it went to january of 2008 highs. we're effectively at five-year highs and you've got a place where people expect european policy also to deliver. but germany, which is the export engine, really, to the world, i think, is telling you something. if you look at their exporters, they have been rallying. if you look at evaluations here, they're not terrible if you look at the export market picking up, especially in china. watch this. it's not all about u.s. fiscal cliff. one of the things we've been seeing rallying in this market are u.s. multinational that are exposed to a better environment. >> quick touch on cummins here. you see the headlines. billion dollar buy back just announced by cmi, so, the sock is trading higher, a little bit in the afterhours session. >> kern? >> without me. they have a great balance sheet.

not surprising they would look to do something positive for the shareholders. >> okay. so we'll continue watching that. mike, out in the options world here, the vicks down 15 1/2. doesn't seem like a bad time to buy some insurance at this point. >> yeah, it doesn't seem that way. i think there's a little bit of an underestimation, though, of what options markets are in. the vicks, over the next 30 days, has to incorporation all of those days, weekends and holiday us, too. we have a couple of holidays coming in. so, if you back those out, what you find is it's a little bit higher than what it looks like right now. 1.6 points higher than it is. cheaper than it's been over the course of five years, not incredibly cheap. if you look at the term structure, it's higher there, too. so, the options markets aren't signaling all clear but in the single stock land, calls outpaced puts by more than single stocks today. bullish attitudes prevailing. >> i want to go back to the

defense sector. record high in the defense index. the philadelphia defense index, a lot of the components, ged, lockheed martin, names we have been talking about, as stocks to buy if there is a deal reached. brian, i think you are actually, that was one of your -- >> we talked about lockheed last night. certainly they are getting this boost because people are buying into the hope that there's going to be some kind of deal done. we had a big selloff since september. so, we have a lot of the fiscal cliff priced in, or at least the worst case scenario. so, now you get a little bit of short cover here. i wouldn't be plowing into these stocks right now, particularly after today's news. just seems -- i think there's better places to go and tim hit on it. look to europe, look to asia. that's where the growth is. there's better places than here in the u.s. >> we should note the mission critical coverage continues today on cnbc. larrdlow next on location with a special show from there at 7:00 p.m. eastern time. you see there his guests, jon

kyl and peter roskam. get a check on a name that's moving right now. jackie, back at heldquarters. >> molycorp is reporting they have a new president and ceo. he is succeeding mark sit that has left the company. he will continue to serve as a director and vice chairman of molycorp's board. the company is looking for a permanent president and ceo. and that stock is moving down, more than 5%. back to you. >> thank you very much, jackie. $1.5 billion market cap company. we talked about this on "fast money" a couple of years ago, when -- >> when china restricted rare earth, this was a great stock to be in. it became a broken momentum stock, the story started to fall apart. the last couple of davedays, th stock was up 20% to 30%. >> it's gone from six bucks around the s.e.c. probe time, $11.33 and actually gave back

after hours, really effectively what it gained today. the stock still looks some what bull proof -- >> really? >> despite the fact you've seen a move after hours in the change on the ceo, there are some people that said, this guy needs to go. and i think there were questions about the surrounding s.e.c. probe, there were questions about the mine in california, so, i think people might be ultimately outside of, there's never, you know, consistency and some vision from the top, is what everybody wants to see and we don't exact lly know what wee going to get. this isn't necessarily bad news. i'm really saying, a stock that's run this much, for this kind of reaction, i'm just saying, this is not a huge reaction. >> we should be clear. the company did not say why mark smith, the former ceo, left as ceo. he just left, so. >> a lot of this has to do with the stock has collapsed since the beginning of the year. it's all out there. you have to be careful with these executives and the changes are being made. coming up next, they are the tech trends you should be betting on for 2013. an all-star tech investor is

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♪ why can't we be friends >> welcome back to "fast money." we are live in times square. big day for facebook tomorrow, as the stock will join the nasdaq 100. but after a 45% rise, in the past month, is now the time to friend facebook shares? let's find out from walter pr e price. walter, good to see you. >> good to see you, melissa.

>> what is your cost basis for facebook? >> our cost basis is about 21 for facebook. >> ah. so, are you still going to stay with it and what do you see is the catalyst for the shares at this point? >> i think the catalyst is continuing to show strong growth in mobile advertising, revenue in the fourth quarter and talk about what they're doing to continue that in 2013. >> hey, walter, it's brian kelly. i know on the list of names you're involved in, western digital, c-gait, stx. we talk about the evaluation, they look fantastic there. here's the part i don't get. maybe you can explain. they produce dinosaurs. their product is going out of business. why do you like them? >> well, i don't think they produce dinosaurs. i'm not a big fan of the pc, but i am a big fan of storage. when i see the growth rate in cameras and postings on facebook, and smartphones, i think people are going to continue to interact with media and the best way to store videos

or photos is on disc drives, so, i think disc drives are going to continue to grow and storage is going to continue to grow. >> walter, you like the cloud names, too, and i would think the thesis behind the cloud names is exactly what detickets from something buying storage. >> well, but remember, the cloud companies buy a lot of disc drives. you know, google buys a lot of disc drives, and so does facebook. and that growth isn't going to slow down. those guys are growing their capital spending, 30% to 50% a year, so -- disc drives, i think, as opposed to pcs, they don't buy a lot of pcs, so, i think that disc drives are going to continue to grow and they're in a lull right now because the industry's transitioning from pc as the driver to cloud as the driver, but i think as cloud and individual storage become the driver of the industry, goes back to a 5% to 10% growth rate. and the stocks are very cheap. >> walter, good to see you. see you soon.

walter price of rcm. so, interesting themes and certainly they have been the themes that have driven a lot of the growth in some of these sub-sectors in technology. >> one of the big things are growth is, it's really hard to find. so, when you find growth, you're going to pay more for it. what i like about this facebook idea now, every evaluation aficionado is going to be avoiding it. growth is very difficult to find in this environment. >> a name that walter had on his -- he likes, salesforce.com, which went to an all-time high today. okay, great. the last couple of years has grown at 35% a year, if you looked at it, 50% a year. but really, you know, betting that corp rate customers are so far behind the curve that they're going to take this thing to multiples, at least, that right now are very unsustainable. i preface this with, saying, i'm a value investor, it's hard for me to chase a stock that really

is somewhere between 200 and 300 times earnings. but that's what people are trying to do here and this scares me. >> if it trades at 200 times earnings, might as well be 500. both are ridiculous. just know that and understand that a lot of people know that and trade it. >> time now for pops and drops, the biggest movers of the day. pop for u.s. steel. b.k.? >> oh, u.s. steel. quite a few price rises coming out of the steel sector. ak steel rose yesterday, slx and u.s. steel all doing well on that. >> did we catch you by surprise? >> yeah. i didn't realize i was first out of the gate. could you tell? >> be on your toes, b.k. baidu up. tim? >> i think evaluation is now in a place where it is some what sane. this is a company that is still the leader in their sector on a chart, this is a place where i really like the stock. i think there are shorts that are very, very nervous. >> dollar general dropped 7%. >> not just a drop today. a lot of drops recently. today, they came out with

earnings that weren't so bad. they talked about the consumer being under pressure, feeling a little bit scared about the fiscal cliff and so i think we're going to see dollar general themselves under pressure, margin pressure, i don't think you need to jump in right here. >> drop for sprint, down 1%. keith? >> good example of a stock that's overowned and this works. when the deal news is bad, you have to be careful. you have to be real careful with sprint. >> pop for texas. >> they released forecast for their q-4 sales, which basically straddles a range that analysts were expecting. invenn toirp tories are very lo uptick in demand would be a positive for them. >> a pop here for le whaf. can you taste that? a new trend floating to aless rant near you. a futuristic food vaporizer transforms food into a inhaleable low calorie cloud

which can be consumed through a special straw. it's spread across europe like fog in london and making its way to the united states sometime soon. do you have to get stoned first? >> is that really a -- >> le whaf. coming up next, it is the fiscal cliff consequence that could fall right into your backyard. up next, a top expert breaks down why no deal could have big implications for a city near you. and later, it's a trade of the day that you can ride all the way to the bank. karen is getting ready to do the big reveal, so stick around. tdd#: 1-800-345-2550 let's talk about low-cost investing. tdd#: 1-800-345-2550 at schwab, we're committed to offering you tdd#: 1-800-345-2550 low-cost investment options-- tdd#: 1-800-345-2550 like our exchange traded funds, or etfs tdd#: 1-800-345-2550 which now have the lowest tdd#: 1-800-345-2550 operating expenses tdd#: 1-800-345-2550 in their respective tdd#: 1-800-345-2550 lipper categories. tdd#: 1-800-345-2550 lower than spdr tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and even lower than vanguard.

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♪ the fiscal cliff less than three weeks away and municipalities like detroit could be in for bigger trouble if a deal is not reached. with higher taxes and a loss of federal funding among the cliff consequences. here to break it down, alexander laventhal. good to see you. >> good to see you. >> in terms of detroit, i would

imagine a lot of it is priced into the bonds already, because they are in dire straits and this cliff would be the next thing. >> right. there have not been a lot of trades of detroit bonds, though there were some out for bid today which did trade and traded about 300 basis points above what you'd see an aaa bond priced at, so, definitely priced into the market. if i were an individual investor right now, would i be looking to take advantage of those yields, no. i would let the whole scenario play out, cliff or not. >> right. puerto rico is another place that could face some trouble. >> yeah, so, puerto rico is an interesting situation. they've got $67 billion in debt outstanding. they've got an economy that certainly is behind -- >> $67 billion -- >> debt outstanding. that could be an issue. they did vote for statehood, and if that does happen, then they could face the loss of the exception that puerto rico bonds

have across the nation. but here's two signs of puerto rico that are very distressing. one is that they have approached debt levels to gdp, like the european countries that we've been talking about, 95%. and the other, this just breaks my heart, they bonded out their debt service, so, they issued bonds to pay the interest on their outstanding bonds. i mean, that's just so far beyond the pale. puerto rico, again, a situation i'd stay away from if i were an individual investor, even though it's attractive to people looking for bonds and can't find bonds in their state. so, some -- and it's not as if those are going to default. i still don't, you know, look at a problem, say, ah, they're not going to pay their debt. but it's really, what's the volatility going to be? how much farther are yields going to go before the situation -- >> at what point do fundamentals trump the flows? i mean, i spent the whole day with clients in new york and it's like, i will buy anything that isn't locked down if it's issued to me at this point.

i mean, that's pretty bubbly. is there a catalyst where the fundamentals trump that? >> you'd think so, given where the yields are, and yields are at 50-year lows. look at the amount of corporate debt that's been issued. so, i would think we'd be there yet, but right now we're not yet. >> are most of your clients, they want to take -- not want to, they are willing to take that interest rate risk, you hedge that out for them and they're just taking on the credit risk? >> what we do with portfolios that we manage is, we manage very defensively so we'll latter bonds, we have high coupon bonds that have a short call, so, those will fluctuate less if and when interest rates go up. >> how much is this fiscal cliff conversation really part of the piling in that's going on? we certainly have the fed there, but then, again, you get down to a tax exception that a lot of people are starting to consider. is this -- this is something that, again, is part of this bubble that i think keith is

talking about, but is also a fed-inspired bubble? >> look, the fiscal cliff, if we go over, is going to affect municipals in a significant way. they're going to face that loss of funding and spending cuts, so -- i think that's going to be an issue regardless. i don't see, right now, that people are investing in municipals because of fiscal cliff issues. they are investing with the idea that taxes are going up, though it's likely that there will be some modification of the tax exemption. >> alexandra, going to leave it there. thank you for coming by. coming up next, how america's role in the global energy market could be in for a big makeover. we make sure you're ready for us. plus, what you need to know and breaking down what's at stake. stick around. [ male announcer ] feeling like a shadow of your former self?

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welcome back to "fast money." let's go right to eamon javers. >> the news is flying a little fast and furious here. let me tell you what we know. house speaker john boehner's office telling me that the white house made a new proposal that we had not heard any dethe tails

on before and in this proposal, they proposed $1.4 trillion in new taxes, now, that is down from their original offer of 1.6 trillion in new revenue. so, that is progress toward an ultimate compromise point at some point down the line here. but that offer made, at some point in the recent past and now we know just within the past half hour or so that boehner's office has made a new counter proposal to that proposal. so, paper is changing hand here. we don't know the specifics, but boehner's office telling me that the white house proposed $1.4 trillion in new revenue and what we're going to have to wait and see here is if the white house confirms that number, as well. the white house at this point is staying mum on all of this. our information here coming from the speaker's office, melissa. >> eamon, it's tim. how much of this is focusing on the republican party just within its own ranks and the horse trading that's going on. the discussions that boehner needs to get paul ryan, eric cantor on board to avoid the tea party boycott. isn't this really the more

important story? this allows them to come in off the leads they're on. >> that's absolutely crucial. speaker boehner has to run for speaker again next year. he's got to get these republicans to a deal and then he's got to get himself re-elected as speaker. he doesn't want to lose his conference, right? he's got to manage that at the same time he's doing this negotiation. he went to the house floor today and said that the president has not been public enough with spending cuts. the speaker really sending a ignal there, i think, to the white house, saying, hey, put some spending cuts on the table here and maybe we can start to deal. but right now, i'm in a lot of political pain up here on capitol hill. >> let's get the market context in all of this, with this, a little bit of give and take, eamon, we're seeing the s&p futures up by a third of a percent. at the market highs of the day, prior to when senator reid threw some cold water on hopes that they're inching closer to a deal here. so, in the after hours, it is interpreted as being a positive development in if fiscal cliff

negotiations. >> and it was -- >> that's right. >> it was all day. at a point, you have to succumb to the reality that the people have information in hand, it's going to come to you after the fact. people get this stuff, it's a game of horse trading, as tim said. people are looking for resolution. the minute they get a whiff of it, this market is going higher. >> le whaf. >> i think that's right. it is a positive development. it is an indication they are inching towards a deal. but we have a long time to go before now and then and we might need a few more offers before we get there. nobody should think they are going to announce something tomorrow. as soon as i say they -- >> you'll get another leak. >> we are inching towards it here and at some point they're going to have a deal but this thing could blow up at any time, too. this is very tense stuff and a lot of people's political futures are riding on this. >> not to mention the country's. >> and that, too. >> eamon, thank you for the update. eamon javers from washington,

d.c. your take on this? >> keith actually hit on this, the market will go higher in the short-term. we're talking about $1.4 trillion in new taxes, so, that's more money coming out of consumers' pocket. if we get an agreement on spending cuts from the government, you're talking about government spending going down, which is perhaps contraction their, if not, it gets gdp to zero, even if you might get all excited we have a deal, you are still looking at a negative economic impact going into 2013. >> and there's multiple components to the deal. understand it's not just about taxes, it's about spending and the debt ceiling. how much of your liberty are you going to give up on taxes to get that kind of spending pain? i don't know. all i can see is the government spending is up 9.5% on an adjusted basis on the third quarter. they have to get that down and i doubt there's a deal until they do. >> let's talk housing. that is certainly although h lll cliff trade. look at the home builder's etf. will the looming cliff burn down

the house? here's what we heard on "squawk on the street." >> the bigger threat is what happens in d.c., the fiscal cliff story. the challenge is, changes to tax law that make it more expensive to own a home. >> if the mortgage interest rate deduction were eliminated, what would happen to this forecast up 950? >> absolutely catastrophic. >> so, here's very bullish. 950 in terms of housing starts added next year, an increase of 22%. if the mortgage deduction is eliminated, we could be looking at flat. coming out today in a report, saying that the fiscal cliff could reverse u.s. home price improvements. so, that sees like a lot of risk built into the sector here. >> yeah, if you look at the sector, evaluation wise -- hd and lowe's price to earnings ratio are above where they were during the peak of the housing bubble. that's a lot of hammers that you have to sell here.

i'm short. that's the way to play it. >> there's a rise which has just within phenomenal and then there's the actual housing market which has had a nice bump but nowhere near what we've seen in the equities, so, i think we could see both, them come down and the housing bottom still continuing and finding strength. >> yeah, i'd say, you know, 1.8 times book, these guys are expensive. people, you know, if you look, they have underperformed the s&p in this kind of post-election, after we troughed, this run back up 5%. they are really underperformed. i think there's already rotation there and people recognize these things are pricey. >> let's move onto our next trade, get some unusual activity in shares of las vegas sands today. mike, what did you see? >> what we saw was the december 45 and a quarter options were trading quite actively. 4,400 of them traded at 53 cents. that's an expectation that the stock could be above $45.78 by december expiration.

by the end of the day, another 1,200 of them traded. unusual bullish activity near term to the upside in lvs. >> and karen, you also flagged this. >> i like lvs. positive data out today and that's good. when penn announced their restructuring, people thought, well, look at what it did for penn stock, maybe lvs will consider it. they did announce a special dividend, so, they are shareholder friendly, considering the gigantic stake. i like it here. coming up, why america's role in the energy market could soon be changing. and how you should be tradings right now. the commodities king breaking it all down after this break. [ male announcer ] the markets keep moving. make sure the news keeps coming with thinkorswim by td ameritrade. use the news links breaking stories with possible breakout stocks, options with potential opportunity, futures and forex with in-depth analysis. it's an all-you-can-eat buffet for all things trading.

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a new energy forecast from exxon mobil. it says america will be a net energy exporter by 2025. though, according to their outlook, the u.s. still won't be energy independent by then. exxon predicts global demand up 35%. dennis gartman, the commodities king joins us now for a deeper

dive into those proprojections. good to see you. >> good to be seen. >> 2025 is a long ways away, dennis. do you buy this? >> well, i think they're actually being very conservative. i think we're going to be energy independent in north america, not in the united states, but in north america, considering canada and the united states together, well before that. the amount of energy that we are finding, the ability to drill more efficiently, what we're doing with fracking, new abilities to take a soda straw, as i like to say, send it down, make it spiral outward and to find crude oil in areas that we didn't know existed before, better use of seismic geology, we're just finding crude oil and natural gas in areas we didn't think existed. and we're doing it very effectively and efficiently and we are becoming at the same time better users of energy. i used to say that my first car, an old valiant, got 7 miles to the gallon. my jaguar gets 29.

we are finding a lot of crude oil, finding a lot of energy, natural gas and we are using it far more efficiently. we're going to be energy independent in a short period of time. >> can you imagine dennis in a valiant back in the day? >> i don't even know what that is. ? >> arm out the window, and just hitting the -- hitting the gas, atta boy. >> well, i would drive it -- i drove my valiant every day to lake forest country club, picked up a bunch of other caddies and caddied my way to oblivion back in the day. >> why do you think your wife isn't really the one pulling for the valiant these days and prefers the jag? >> actually -- >> not. you. >> my wife would pull for anything i do. >> take you off the spot here. >> dennis, i want to get back to the oil conversation in terms of the pricing. if we are a net exporter of oil in the future, what happens to the prices in your view? >> well, as i've said before, i think i told you last week on

the show, there's clearly an awful lot of hundred dollar crude oil around. there's a lot of $90 crew oil. there's plenty of $85 crude oil. we are probably out of $40 crude oil. we're going to look down to see what $60 crude oil looks like. so, for the past several weeks, i've been a buyer of stocks and a seller of crude. one against the other. i'm going to continue to do more of that. the market is saying that it's right. there's a lot, a lot of $85 crude oil around. there's going -- we're going to test and see what we have at $65. i think in a year or two, we'll be down to that level. >> dennis, a lot of people disagree with that, because they think the marginal cost of oil is going to support a higher number than that. i agree with you, the commodity bubble is in motion, it's popping. do you think we're in the third inning of that, sixth, late ninth? >> good question. i think we're probably -- yes, i think we're early in it. i don't think people are aware how efficient we've become and

what's going on on the oil patch. look at what's going on in north dakota. a number of people have talked about it. north dakota, in the past year and a half, has gone past alaska, gone past california and to become the second largest producer of crude oil in the united states. most people in the united states don't even know we get crude oil from the dakotas, but we do. and now, texas has increased, once again, its production of crude, i think, texas has gone up almost a million barrels a month in the last several months in production facilitiefaciliti. when i was back in ohio, back in my home awhile back, i thought it was most impressive that steel companies that had been closed for years are working 24/7 to produce the pipe for the oil industry here in the united states. it's a change going on that not enough people are paying attention to. >> all right, dennis, great to see you. >> always good to be seen. >> dennis gartman of the world renowned gartman letter. all right, are you bearish oil? >> yeah, i mean, the only reason i see oil up here is the

geo-political risk. it's a tough short at this point. but i take the next step and look forwards canada. they had a housing bubble that's built on energy and commodity exporting. if we get $60 oil, some of the canadian banks and stocks aren't going to do that well. ewc is the etf and that's what rhyme short. >> let's do some fast or fiction here. there's a share buy-back in morgan stanley's fear future. the company is considering one for the first time since the financial crisis. james gorman saying just last month it would be a good idea to return capital to what he calls long suffering shareholders. 19 big banks have until january 7th to submit their share reper chase plans as part of the stress test process. so, fast or fiction, morgan stanley will do a byuy-back. and the follow-up, who is going to be next? 19 banks that are going to ask, come january, and so, which ones should we look to? >> well, i think you listen to

mr. gorman, he sees the stock trading at .58 times price to book and this is a place where this is significant value for a company that is struggling with its old business model. so, this makes sense. i would call it possible fast. >> okay. karen? >> well, creative on a book basis, wouldn't shock me if they did. but i have to think bank of america would submit. >> buy-back, okay. mike, in the options world, sometimes stocks you can see a dividend being priced in. are you seeing any of that sort of action within the banks? well, i think we continue to see some optimism for share prices. maybe not as much speculation on dividends as we had in the past. and one of the reasons is that the expectation in the past was always that you would see regular dividends and now we see so much activity going on with special dividends and the options adjust options for that. so, i think it has a lot of options a little bit perplexed on how to play it best. we saw a lot of activity going into a couple of months ago, but

now, we're seeing less of that and now, instead, it's mostly just bullish bets, hoping for something to create like a buy back or a dividend that would propel share prices more than returning cash directly. >> okay, time now to take a look at some hits and misses here. sometimes the traders hit out out of the park, sometimes they swing and the miss. let's play the good, the bad and the ugly. brian kelly, the star tonight. first the good, last month, he kindled good feelings for amazon. take a listen. >> i mean, i think online's much better, that's the way i'd rather do it. what you play is via amazon. still looks good. they certainly have a tax issue with every state, but it's still the dominant player there. i still like it. >> shares of amazon up 8% since that call. so, what do you do here? >> well, i would take a little bit off the table on this one. i think that you've had all the run-up here to the holiday season and they still are the dominant player, but getting stretched once again and at som something off the table. >> how do you decide that all of

a sudden it's stretched when the p.e. prior to the 8% rise -- >> i'll tell you exactly why. because when i originally talked about that, nobody was talking about valuation. >> what? what? >> the only thing i have to say about amazon is its valuation. >> in general, in general. what i'm saying is, when amazon hits a low like that, and it's a -- to me, p.e. is a relative valuation tool. so, it doesn't really matter if it's -- >> relative to what? infinity, beyond? >> historic valuation. >> yeah. so, when the p.e. of amazon gets down to a certain level, buyers come in, people stop talking about it. you're always going to have doubters that a 200 p.e. doesn't work. but -- >> it's a relative evaluation. >> when it gets up at these levels, did opportunity matter. >> this is the good, not the bad and the ugly and he's acting like he just got -- >> i would have folded at 100. >> i don't want to know what bad looks like.

>> that's it for me. >> all right, let's do it. the bad. on that same day, in fact, b.k. was taking a look at a natural gas play. here's what he said. >> the rumors of natural gas's death are greatly exaggerated by ung. >> was that the same day, i hope? >> if it was the same day, it was a different location. >> good and bad in one day. >> ung down 13% since then. so, what do you do? >> yeah, i'm still long natural gas. we've got some warmer weather, the old saw is that when gas traders have to put their slippers on in the morning, natural gas goes down. that's what happened over the last couple of weeks. i still like the structural play here. >> are gas traders wearing slippers? would that be a silk slipper? >> an ugg. >> sheepskin. >> komono, or -- >> yeah, i don't get that close to gas traders. >> just trying to understand. >> yeah. keep trying, tim. let's get out to brian shackman, with a look at what's coming up next. hey, brian.

>> melissa, the fiscal cliff, does it have a relationship to free agency in baseball? we had to go all the way to nashville, tennessee, to find out. we'll share some of the details on that one when "fast money" comes right back. let's give thanks - for an idea. a grand idea called america. the idea that if you work hard, if you have a dream, if you work with your neighbors... you can do most anything. this led to other ideas like liberty and rock 'n' roll. to free markets, free enterprise, and free refills. it put a man on the moon and a phone in your pocket. our country's gone through a lot over the centuries and a half. but this idea isn't fragile.

when times get tough, it rallies us as one. every day, more people believe in the american idea and when they do, the dream comes true. we're grateful to be a part of it. music is a universal language. but when i was in an accident... i was worried the health care system spoke a language all its own with unitedhealthcare, i got help that fit my life. information on my phone. connection to doctors who get where i'm from. and tools to estimate what my care may cost. so i never missed a beat. we're more than 78,000 people looking out for more than 70 million americans. that's health in numbers. unitedhealthcare.

the fiscal cliff and professional sports? is there a connection there, too? brian shackman is here with details on how we thought it was impacting baseball. brian? >> melissa, last week, we discussed the impact of the fiscal cliff on baseballs. free agents might try to get more upfront money to protect against the possibility of higher rates, because with an average salary of around $3.5 million, and a league minimum of $480,000, all these guys are 1%. two big deals before the winter meetings. b.j. upton, $75 million contract and evan longoria's 1$100 millin extension. upton had a $3 million bonus and longoria shifted $4 million out of next year. i confirmed this, and what i found was pretty surprising. >> that's part of any negotiation. it's not unique to this year.

obviously because of, you know, everything that's -- the whole world is sort of watching the last month here in the united states, so, there's a lot more focus and we get that question a lot, but that is a part of every negotiation. >> i think it would be more on a back-end consideration for a player in what he's deciding. >> billy beane was cool. longoria's people said that fiscal cliff was not a factor. baseball doesn't front load. not part of the culture. players and agents would love it, but teams won't do it. guys? >> all right, and obviously, brian, if it's a multiyear contract and you're front loading that pay, there's less of an incentive. usually you back load a cown tract. >> and baseball is known for deferred money. that's the culture. upton is not going to get $75 million upfront. they don't have the cash flow for it. i was surprised that agents weren't asking more for it. they didn't even think of it. >> brian, isn't it just that guys like zach green key, who just signed the richest contact

in history, are getting more money because, hey, i'm losing more to taxes. this could be a baseball show. i would love that. >> i would fight to be on that. these guys don't want to rattle cages with this and, let's face it. $144 million and that's, you know, so many multiples more than i got the year before, i just don't even think it's in consideration, compared to the nfl, where contracts are not guaranteed. they front load a lot because a player's career can end on any play. >> brian, thank you. of course, if you want to talk more baseball with brian or other sports, for that matter, tune in thursday, 7:00 p.m. for "sports biz." coming up on "mad money," cramer is back from his day in d.c. and he's talking to john hoeven. find out how the luxury consumer is faring. and, is the best item on yum's value menu itself? that's all coming up, top of the

hour with jim cramer. your first move tomorrow coming up after this. it's a new day.

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